Cuevas Company produces magic swords.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system for 2017: $\begin{array}{|l|l|} \hline{\text { Standard/Budgeted Data }} \\ \hline \text { Material } & \begin{array}{l} 1 / 2 \mathrm{~b} . @ \$ 15.00 \text { per } \\ \mathrm{b} . \end{array} \\ \hline \text { Labor } & \begin{array}{l} 1.2 \mathrm{hrs} . @ \$ 12 \mathrm{per} \\ \mathrm{hr} . \end{array} \\ \hline \text { Fixed overhead } & \$ 62,000 \\ \hline \begin{array}{l} \text { Variable } \\ \text { overhead } \end{array} & \$ 11 \text { per unit } \\ \hline \text { Production } & 2,000 \text { units } \\ \hline \end{array}$ $\begin{array}{|l|l|} \hline {\text { Actual Data }} \\ \hline \text { Produced } & 2,100 \text { units } \\ \hline \begin{array}{l} \text { Materials } \\ \text { purchased } \end{array} & 1,050 \mathrm{lbs} \text {. for } \$ 14,700 \\ \hline \text { Materials used } & 1,080 \mathrm{lbs} . \\ \hline \text { Laborworked } & \begin{array}{l} 2,500 \mathrm{hrs} . \text { costing } \\ \$ 29,375 \end{array} \\\\ \hline \text { Overhead } & \$ 82,000 \\ \hline \end{array}$ How much is the standard cost per unit?

A) $21.90 B) $63.90 C) $69.00 D) $62.42 A) $21.90 B) $63.90 C) $69.00 D) $62.42

Harris Manufacturing produces white sauce.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system for 2017: $\begin{array}{|l|l||l|l|} \hline {\text { Budgeted and Standard Data }} & &\text { Actual Data } \\ \hline \text { Material } & \begin{array}{l} 1 / 4 \mathrm{lb} . @ \$ 14 \text { per } \\ \text { pound } \end{array} & \text { Froduced } & 6,200 \text { units } \\\hline \text { Labor } & \begin{array}{l} 1.4 \mathrm{hrs} \text { hour } @ \$ 16 \text { per } \\ \text { hour } \end{array} & \begin{array}{l} \text { Materials } \\ \text { purchased } \end{array} & \begin{array}{l} 1,600 \mathrm{lbs} \text { for } \$ 13.70 / \\ \text { pound } \end{array} \\\hline \text { Total fixed overhead } & \$ 84,000 & \text { Materials used } & 1,520 \mathrm{lbs} . \\ \hline \text { Variable overhead } & \$ 6.50 \text { per unit } & \text { Labor worked } & 8,740 \mathrm{hrs} \text {. at } \$ 15.90 \text { /hour } \\ \hline \text { Production } & 6,000 \text { units } & \text { Total overhead } & \$ 122,000 \\ \hline \end{array}$ How much is the overhead volume variance for 2017?

A) $2,300 favorable B) $2,800 favorable C) $0 D) $5,100 favorable A) $2,300 favorable B) $2,800 favorable C) $0 D) $5,100 favorable

Rodchester Company uses standard costing.Overhead is applied at $12 per unit produced.Data for the month of March follows: $\begin{array}{lr} \text { Actual overhead costs } & \$ 194,000 \\ \text { Actual units produced } & 17,400 \\ \text { Flexible budget overhead for units produced } & \$ 210,000 \end{array}$ How much is the overhead volume variance?

A) $16,000 favorable B) $17,200 favorable C) $1,200 unfavorable D) $14,800 unfavorable A) $16,000 favorable B) $17,200 favorable C) $1,200 unfavorable D) $14,800 unfavorable

Haley Fans manufactures and distributes circulators.The standard and actual costs for the manufacture of circulators follows: $\begin{array}{|l|l|} \hline{\text { Standard Costs }} &{\text { Actual Costs }} \\ \hline \text { Variable cost, } \$ 24 \text { per unit } & \text { Total variable cost, } \$ 12,300 \\ \hline \text { Fixed cost, } \$ 40 \text { per unit } & \text { Total fixed cost, } \$ 19,250 \\ \hline \end{array}$ Budgeted factory overhead was $32,000.Overhead applied is based on the number of circulator units produced.The company estimated that 500 circulators would be produced, however only 480 were produced.How much is Haley's overhead volume variance for 2017?

A) $800 unfavorable B) $830 favorable C) $450 favorable D) $50 unfavorable A) $800 unfavorable B) $830 favorable C) $450 favorable D) $50 unfavorable

Exam 11: Standard Costs and Variance Analysis

Electric Zero produces relay units for generators.Each relay has a standard material cost of $67.Standards call for two relays per generator.In July, the company purchased 120 relays for $7,560.The company used 104 relays in the production of 50 generators, with 4 relays damaged in the installation process.The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23.The company incurred 1,020 labor hours at a cost of $22,950.How much is the material quantity variance?

(Multiple Choice)

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Question 21

Cuevas Company produces magic swords.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system for 2017: Standard/Budgeted Data Material 1/2.@\ 15.00 per . Labor 1.2.@\ 12 . Fixed overhead \ 62,000 Variable overhead \ 11 per unit Production 2,000 units Actual Data Produced 2,100 units Materials purchased 1,050 . for \ 14,700 Materials used 1,080. Laborworked 2,500. costing \ 29,375 Overhead \ 82,000 How much is the standard cost per unit?

(Multiple Choice)

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Question 22

Straton Company produces one product, the H2001.Each unit of H2001 requires 6.5 pounds of raw material with a standard cost of $12.00 per pound.During July, Straton purchased 3,500 pounds of this raw material at a price of $12.25 per pound and used 3,280 pounds to produce 500 units of the H2001.How much is the material price variance?

(Multiple Choice)

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Question 23

The material quantity variance compares the actual quantity of material purchased with the quantity of material used.

(True/False)

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Question 24

Electric Zero produces relay units for generators.Each relay has a standard material cost of $67.Standards call for two relays per generator.In July, the company purchased 120 relays for $7,560.The company used 104 relays in the production of 50 generators, with 4 relays damaged in the installation process.The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23.The company incurred 1,020 labor hours at a cost of $22,950.How much is the material price variance?

(Multiple Choice)

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Question 25

Which of the following statements is true of standard cost?

(Multiple Choice)

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Question 26

A purchasing manager might be tempted to buy inferior materials because it will create favorable material quantity variance.

(True/False)

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Question 27

Electric Zero produces relay units for generators.Each relay has a standard cost of $67.Standards call for two relays per generator.In July, the company purchased 120 relays for $7,560.The company used 104 relays in the production of 50 generators, with four relays damaged in the installation process.The standard quantity of labor is 20 hours per generator, with a standard wage rate of $23.In July, the company incurred 1,020 labor hours at a cost of $22,950.How much is the labor rate variance?

(Multiple Choice)

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Question 28

Harris Manufacturing produces white sauce.It uses units as the cost driver for overhead.The following information was provided concerning its standard cost system for 2017: Budgeted and Standard Data Actual Data Material 1/4.@\ 14 per pound Froduced 6,200 units Labor 1.4 hour @\ 16 per hour Materials purchased 1,600 for \ 13.70/ pound Total fixed overhead \ 84,000 Materials used 1,520. Variable overhead \ 6.50 per unit Labor worked 8,740 . at \ 15.90 /hour Production 6,000 units Total overhead \ 122,000 How much is the overhead volume variance for 2017?

(Multiple Choice)

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Question 29

Rodchester Company uses standard costing.Overhead is applied at $12 per unit produced.Data for the month of March follows: Actual overhead costs \ 194,000 Actual units produced 17,400 Flexible budget overhead for units produced \ 210,000 How much is the overhead volume variance?

(Multiple Choice)

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Question 30

Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at \ 1.30 per ounce) \ 4.55 Labor (0.30 hour at \ 12.00 per hour) 3.60 Overhead 2.20 Total \ 10.35 At the start of 2017, Scotch Brand planned to produce 80,000 cases of tape during the year.Overhead is allocated based on the number of cases of tape produced.Annual fixed overhead is budgeted at $56,000 and variable overhead costs are budgeted at $1.50 per case.The following information summarizes the results for 2017: -Actual production, 75,000 cases -Purchased 275,000 ounces of material at a total cost of $343,750 -Used 266,250 ounces of material in production -Employees worked 22,000 hours, total labor cost $275,000 -Actual overhead incurred, $175,000 How much is the material quantity variance for 2017?

(Multiple Choice)

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Question 31

Standard Tires' labor standard for the production of one bicycle tire is 4.5 hours at $8.50 per hour.During October, the company's employees produced 140,000 tires, using 610,000 hours at a total cost of $5,328,400.How much is Standard Tire's labor efficiency variance?

(Multiple Choice)

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Question 32

In which of the following situations will the overhead volume variance be favorable?

(Multiple Choice)

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Question 33

Scotch Brand Products produces packaging tape and has determined the following to be its standard cost of producing one case of budget packaging tape: Material (3.50 ounces at \ 1.30 per ounce) \ 4.55 Labor (0.30 hour at \ 12.00 per hour) 3.60 Overhead 2.20 Total \ 10.35 At the start of 2017, Scotch Brand planned to produce 80,000 cases of tape during the year.Overhead is allocated based on the number of cases of tape produced.Annual fixed overhead is budgeted at $56,000 and the variable overhead costs are budgeted at $1.50 per case.The following information summarizes the results for 2017: -Actual production, 75,000 cases -Purchased 275,000 ounces of material at a total cost of $343,750 -Used 266,250 ounces of material in production -Employees worked 22,000 hours, total labor cost $275,000 -Actual overhead incurred, $175,000 How much is the overhead volume variance for 2017?

(Multiple Choice)

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Question 34

Haley Fans manufactures and distributes circulators.The standard and actual costs for the manufacture of circulators follows: Standard Costs Actual Costs Variable cost, \ 24 per unit Total variable cost, \ 12,300 Fixed cost, \ 40 per unit Total fixed cost, \ 19,250 Budgeted factory overhead was $32,000.Overhead applied is based on the number of circulator units produced.The company estimated that 500 circulators would be produced, however only 480 were produced.How much is Haley's overhead volume variance for 2017?

(Multiple Choice)

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Question 35

Thomas Company produces one product, the E4501.The standards for E4501 include the use of 25 yards of raw material at a standard price of $4.42 per yard.During a recent month, the company used 65,000 yards of raw material to produce 2,580 units of E4501.Thomas purchased this material at a cost of $4.37 per yard.How much is the material quantity variance?

(Multiple Choice)

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Question 36

For which one of the following will standard costs be most useful?

(Multiple Choice)

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Question 37

Which of the following may cause an unfavorable material variance? I.More material was used than planned. II.A company paid a higher price for materials than expected. III.More materials were used than purchased.

(Multiple Choice)

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Question 38

Which of the following is not a criterion that a company might use to determine whether or not a variance is exceptional?

(Multiple Choice)

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Question 39

For which of the following reasons does the volume variance arise?

(Multiple Choice)

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Question 40

The material quantity variance compares the actual quantity of material purchased with the quantity of material used.

Which of the following statements is true of standard cost?

A purchasing manager might be tempted to buy inferior materials because it will create favorable material quantity variance.

Rodchester Company uses standard costing.Overhead is applied at $12 per unit produced.Data for the month of March follows: Actual overhead costs \ 194,000 Actual units produced 17,400 Flexible budget overhead for units produced \ 210,000 How much is the overhead volume variance?

Standard Tires' labor standard for the production of one bicycle tire is 4.5 hours at $8.50 per hour.During October, the company's employees produced 140,000 tires, using 610,000 hours at a total cost of $5,328,400.How much is Standard Tire's labor efficiency variance?

In which of the following situations will the overhead volume variance be favorable?

For which one of the following will standard costs be most useful?

Which of the following may cause an unfavorable material variance? I.More material was used than planned. II.A company paid a higher price for materials than expected. III.More materials were used than purchased.

Which of the following is not a criterion that a company might use to determine whether or not a variance is exceptional?

For which of the following reasons does the volume variance arise?

Managerial Accounting in the Information Age

Job-Order Costing for Manufacturing and Service Companies

Process Costing

Cost-Volume-Profit Analysis

Variable Costing

Cost Allocation and Activity-Based Costing

The Use of Cost Information in Management Decision Making

Pricing Decisions

Capital Budgeting Decisions

Budgetary Planning and Control

Decentralization and Performance Evaluation

Statement of Cash Flows

Analyzing Financial Statements: a Managerial Perspective

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